Recent Changes To Capital Markets Regulations

The Capital Markets Board has recently effected changes to Communiqué No II-23.1 on Common Principles regarding Significant Transactions and Retirement Rights (“Communiqué No II-23.1”). The amendments to Communiqué No II-23.1 were published in the Official Gazette numbered 30395 dated 18 April 2018 and introduce a new exception to “retirement rights”.

In broad terms, retirement rights are tools of shareholder protection which allow minority investors a path to exit on the occurrence of certain “significant transactions”.

Article 12 of Communiqué No II-23.1 lists cases where “significant transactions” as described in the Communiqué will not give rise to retirement rights. The amendments to Article 12 of Communiqué No II-23.1 expand this list to include disposals made to finance the repayment of financial indebtedness.

According to the amendment, a disposal will not give rise to retirement rights if not less than 90% of the related proceeds are used for the repayment of obligations under outstanding bank loans and debt instruments within one month following that disposal. Furthermore, the requirement for 90% of proceeds to be applied towards repayment of financial indebtedness will not apply where related proceeds retire all outstanding bank loans and debt instruments.

Note that this new exception is not applicable to disposals made to related parties.

Authors:

Murat Soylu

Can Özilhan

Aykut Aydın